Consider the Following Variables: G = Government Purchases

question 101

Multiple Choice

Consider the following variables: G = government purchases
I = interest rate on government debt
D = stock of government debt
T = net tax revenue
The government's budget constraint can be expressed as

• A)(G + iD)= borrowing - T.
• B)(G + iD)- T = borrowing.
• C)(G + iD)+ T = borrowing.
• D)G - T - (iD)= borrowing.
• E)(G - iD)= borrowing + T.

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Definitions:

Shares Of Stock

Shares of stock represent units of ownership interest in a corporation, giving shareholders a portion of the company's profits and assets.

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders, and it has its own rights and liabilities distinct from those of its owners.

Federal Statutes

Laws enacted by the federal government of a country.

Proprietorship

A business structure owned by a single individual, where the owner is entitled to all profits and responsible for all debts and liabilities.